Cost-Methods {antitrust} R Documentation

## Methods for Calculating marginal and Variable Costs

### Description

For Auction2ndCap, calcMC calculates (constant) marginal cost for each product. For those classes that do not require prices, returns a length-k vector of NAs when prices are not supplied.

For Bertrand, calcMC computes either pre- or post-merger marginal costs. Marginal costs are assumed to be constant. Post-merger marginal costs are equal to pre-merger marginal costs multiplied by 1+‘mcDelta’, a length-k vector of marginal cost changes. ‘mcDelta’ will typically be between 0 and 1.

For Auction2ndLogit, calcMC computes constant marginal costs impied by the model.

For Cournot, calcMC calculates marginal cost for each product.

calcdMC computes the derivative of either pre- or post-merger marginal costs. The derivative of Marginal costs is assumed to be constant. Post-merger marginal costs are equal to pre-merger marginal costs multiplied by 1+‘mcDelta’, a length-k vector of marginal cost changes. ‘mcDelta’ will typically be between 0 and 1.

calcVC computes either pre- or post-merger variable costs. Variable costs are assumed to be quadratic by default. Post-merger variable costs are equal to pre-merger variable costs multiplied by 1+‘mcDelta’, a length-k vector of marginal cost changes. ‘mcDelta’ will typically be between 0 and 1.

### Usage

```## S4 method for signature 'Bertrand'
calcMC(object, preMerger = TRUE)

## S4 method for signature 'VertBargBertLogit'
calcMC(object, preMerger = TRUE)

## S4 method for signature 'Auction2ndCap'
calcMC(object, t, preMerger = TRUE, exAnte = TRUE)

## S4 method for signature 'Cournot'
calcMC(object, preMerger = TRUE)

## S4 method for signature 'Auction2ndLogit'
calcMC(object, preMerger = TRUE, exAnte = FALSE)

## S4 method for signature 'Stackelberg'
calcdMC(object, preMerger = TRUE)

## S4 method for signature 'Cournot'
calcVC(object, preMerger = TRUE)
```

### Arguments

 `object` An instance of the respective class (see description for the classes) `preMerger` If TRUE, the pre-merger ownership structure is used. If FALSE, the post-merger ownership structure is used. Default is TRUE. `t` The capacity profile of each supplier. Default is ‘preMerger’ capacities. `exAnte` If ‘exAnte’ equals TRUE then the ex ante expected result for each firm is produced, while FALSE produces the expected result conditional on each firm winning the auction. Default is FALSE.

[Package antitrust version 0.99.25 Index]